Globalization Challenges in Brazil

1384 Words6 Pages
Globalization Challenges in Brazil There are a number of challenges in the Brazilian market, including uneven income distribution, poor public education, significant imbalance of market concentration, and an informal economy that hinders tax collection and keeps its economic growth from reaching its full potential. These factors create a complex business environment with obstacles for U.S. exporters. Doing business in Brazil requires intimate knowledge of the local environment, like costs of doing business. Distribution, government procedures, employee benefits, environmental laws, and a complex tax structure are all often related costs of doing business. Besides facing tariff barriers, U.S. companies will find a complex customs system, and an overloaded legal system with a lengthy process for enforcing IPR and commercial law. Heavy taxes increase consumer prices up to 100%, while bureaucratic procedures and burdensome product licensing also raise costs. “Brazil also has an inadequate Internet infrastructure and comparatively, low levels of connectivity. Fast Internet connections are only found in the densely populated South East of the country. Broadband connections are relatively slow and expensive. Fiber optic networks are being put in place, but progress is slow because of the high levels of initial investment. (Silicon Valley, 2011)” Brazil is a both a blessing and a burden for foreign investors. “Business Basics in Brazil: Big opportunities, challenges go hand in hand,” by Gary James, sheds light on a few of the challenges met when attempting to expand ones business to Brazil. According to James, “challenges include a highly complex and expensive tax and labor environment, burdensome bureaucracy, costly credit, lingering corruption and deep social imbalances. On the World Bank’s Doing Business Index, Brazil ranks 127th among 183 countries in the ease of doing
Open Document